2 months ago

Economic emancipation a long way off

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More than 50 years ago, the emergence of Bangladesh as a sovereign nation-state was puzzling to many. They were pessimistic about the future of the newly independent country-- and some even thought that the country would survive only to suffer from poverty, hunger and malnutrition.  Moreover, natural calamity would continue to take heavy toll on the resource-scarce country and the world would witness a debt-burdened economy, they presumed. Over five decades after the independence, Bangladesh gives the lie to its detractors.

 Bangladesh is now one of the vibrant economies in the world. Poverty has been reduced significantly, hunger is low and there is no widespread malnutrition. The country is now considered a model for managing natural disaster and achieving food autarky. A significant achievement on the development journey is ensuring food security by expanding the food-safety net. A big increase in output of food-grains, especially rice, coupled with strong public food- distribution system, is a pivotal push behind the advances. Increase in the use of better sanitation, greater access to safe drinking water and almost cent-percent electrification of households have transformed the landscape of the country.

Again, with a continuous successful debt-servicing record, there is a significant reduction in foreign aid. The country has been transformed into a trade-oriented investment-hungry nation. Bangladesh is now the second-largest exporter of ready-made garments (RMG) in the world.  Its total merchandise-trade volume crossed US$100 billion in 2021 in a steady rise from below $20 billion in 2000.

As a matter of fact, the current state of Bangladesh economy is an outcome of people's relentless struggle and effort. Farmers are at the forefront of the struggle followed by factory labourers and non-resident workers. Enthusiastic private entrepreneurs and businessmen play the role of catalyst in enhancing production and creating employment. Realistic economic policies, although sometimes distorted and misguided, have made room for persistent investment. A quick shift from central planning to market-oriented and private-sector focused approach have opened up avenues for economic growth. Though the shift was not smooth and it took two decades to initiate painful reform for trade liberalisation, the move paid off in the long run.

The economy of the country gathered pace at the beginning of the `90s after overcoming a sluggish trend in the first two decades after the independence. Increased public investment along with pro-development activities of the non-governmental organisations (NGOs) contributed significantly to the overall development. With the passage of time, ordinary people have expressed their eagerness to improve their socioeconomic condition. Besides youths, elderly people also came forward working hard for bettering their livelihoods.

The persistent growth in the country's Gross Domestic Product (GDP), with seasonal fluctuations, is a big achievement thanks to three core drivers of growth-- agriculture, industry and remittance--as observed by many economists and development analysts. They also assert that Bangladesh has successfully proved false its labelling as a 'basket case' and 'test case of development'. It is remarkable to see that the country that entered 5-plus growth regime in the '90s rose to 6-plus in the following decade. It was followed by 7-odd annual average growth rate by the middle of subsequent decade. The persistent economic growth reflects the advancement of the country, no doubt. The country's GDP, based on PPP, in terms of global share was only 0.38 per cent in 1980, which increased slightly to 0.43 per cent in 2000. In 2022, the ratio jumped to 0.83 per cent, according to the International Monetary Fund (IMF) statistics. The growing size of the economy, now 42nd in the world, has also helped to manoeuvre the country's interest in different global forums. 

Though there is no single factor behind the current economic advancement, political stability, especially in the last decade, contributed significantly. During the first two decades, the country had faced many spells of political violence and instability. Transition to democratic regime in the early '90s set a path for the nation to move ahead at a faster pace.   

As disruptive political activities created barriers to tapping the economic potential significantly in the 90's and the next decade, it became big challenge to ensure political stability for the economic growth. With some calculated moves, including semi-authoritarian approach, the country found stability in the last decade, which provided more boost to economic activities. Construction of a large number of physical infrastructures and enhanced countrywide connectivity have brought a remarkable change. Stress on information technology and communications gave a big push in digital connectivity also.

All these achievements apart, a lack of good governance has widened the scope for rent-seeking and cronyism that has resulted in gaping income disparity. This is a sad development as excessive focus on economic growth ignores the need to address the income as well as expenditure disparities. Though per-capital income (GDP) in Bangladesh rose to $2687 last year, real distribution is quite uneven, which is not captured in growth statistics. Extended informal economic activities, poor wage conditions of most of the labourers and workers and high inflation mean that a large number of people are yet to benefit from the higher economic growth.

Thus, the challenge lies in addressing inequality by curbing rent-seeking and cronyism that requires good governance backed by strong political will. As the nation is celebrating the 53rd Independence Day today, inequality casts a shadow on the nation's remarkable achievements on the socio-economic front during the last 52 years.  To remove the shadow, it needs more work so that people can get a better and balanced access to national resources in the end. The real economic emancipation-- the core objective of the political independence-- will be achieved only then.

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